With less than three months to go until the UK is due to leave the EU, attention is focused on how to keep vital trade routes across the English Channel flowing as smoothly as possible.
“I am expecting the channel ports to operate normally in all Brexit circumstances,” the Transport Secretary Chris Grayling told the BBC this week.
But in the event of a no-deal Brexit (the UK leaving the EU without any formal Withdrawal Agreement and no transition period), the government’s own advice contradicts him.
A statement issued by the Cabinet Office last month said that cross-government planning assumptions have been revised to show that, in a worst-case scenario, “there will be very significantly reduced access across the short strait [between Dover and Calais] for up to six months”.
The statement noted that, in a no-deal scenario, the EU would impose full third-country controls on people and goods entering the EU from the UK. The impact, the Cabinet Office said, would affect both imports and exports at Dover and Folkestone (home of the Channel Tunnel) because of the “frequent and closed loop nature” of the crossings.
So why has Dover become so integral to the UK’s economic system?
It is by far the biggest destination in the country for roll-on roll-off ferries (known as Ro-Ro, which means cargo is driven on and off rather than lifted by cranes). Dover handled 2.9 million units of Ro-Ro freight last year, most of which were lorries with drivers.
It is also the main access route for trade with the rest of the EU inside the single market. Lorries currently simply drive on and off ferries and are on the motorway within a matter of minutes.
But any lorries arriving from a non-EU country, such as Switzerland, are subject to longer delays.
“If customs don’t want to check anything, that would [still] delay the vehicle by about an hour or an hour and a half [while the driver waits for a decision],” Andrew Baxter, the managing director of the freight logistics company Europa Worldwide, told a House of Commons Committee last year.
“If customs wanted to do a documentary check, that could delay it by up to three hours, and if there was an inspection of the goods, that could delay it by up to five hours” he added.
Even though such checks are in the low single digits in percentage terms, it doesn’t take much for long queues to develop in the tight confines of the port of Dover.
That’s why the government says that, in the event of no-deal, it would minimise checks at Dover to the greatest extent possible and could, in theory, simply wave trucks through. But, as the Cabinet Office acknowledges, it cannot control what the EU will do on the other side of the Channel.
Supporters of Brexit, though, have said consistently that the threat of chaos at Dover has been exaggerated.
The Conservative MP Jacob Rees-Mogg has often quoted a statistic that it takes only six seconds to complete customs checks for goods arriving at the port of Southampton from outside the EU. There is, he has suggested, no reason why ports such as Dover cannot implement similar systems.
DP World Southampton, which operates the container terminal with the Port of Southampton, confirmed that customs declarations are processed in approximately six seconds, but it emphasised that, at that point, the cargo is not customs-cleared.
It normally takes about an hour for customs clearance to be completed after a vessel arrives at port, but crucially that depends on customs declarations and other documents being submitted “typically 2 to 3 days before” the ship reaches Southampton.
It is a system that works well at ports like Southampton or Felixstowe for goods arriving from the other side of the world. If a ship is at sea for several weeks, it gives companies plenty of time to get all their paperwork in order.
The challenge with Ro-Ro freight, which becomes more acute as crossings get shorter, is that you have less time to do that. On the 90-minute journey from Calais to Dover, with the sheer volume of traffic which uses that route, it is something of a non-starter.
One potential solution, according to Andrew Baxter, would be to force companies not to use Calais as a customs point for checking industrial goods, but to use inland clearance points instead, perhaps in the EU country of final destination.
“No one wants delays, on either side,” he said, “and we have to be practical.”
But EU law would not allow health and safety inspections for food and animal products arriving from a third country (like the post-Brexit UK) to take place very far inland.
They have to be carried out at designated Border Inspection Posts (BIPs), at the first point of entry into the single market, on 100% of products.
That has led the National Farmers Union to warn that parts of the British food industry could face ‘catastrophic consequences’ as a result.
The Environment Secretary Michael Gove appears to agree.
“At the moment there are no Border Inspection Posts at Calais,” Mr Gove told the Oxford Farming Conference on Thursday. “While we do hope the French take steps to build capacity there, that capacity is unlikely by the end of March to be generous.
“It’s a grim but inescapable fact that in the event of a no-deal Brexit, the effective tariffs on beef and sheep meat would be above 40%,” he added.
“In both cases about 90% of that export trade goes to the EU.”
And much of it is transported via the Channel Tunnel or from Dover to Calais by sea.
If you have a huge amount of space, there are ways to try to minimise the problem of queuing.
Rotterdam in the Netherlands is Europe’s largest port, and some of the freight containers that are shipped there are inspected at a BIP more than 40 kilometres from the furthest arrival terminals, but still inside the port authority area.
Ro-Ro traffic is a little different, because the freight is accompanied by a driver and it is much more time-dependent, especially if lorries are carrying fresh produce.
But the efficiency of the system is – according to a spokeswoman for Eurofrigo, the company that runs BIPs in Rotterdam – one of the main reasons customers use that route for import and export.
Other UK ports
So, can other ports share the load, to take some of the strain off the systems in Dover? That is certainly part of the government’s contingency planning.
The port of Ramsgate has received plenty of attention in the last few days, with the well-documented news that a company which owns no ferries has been chosen to reopen the ferry route from Ramsgate to Ostend in Belgium.
Thanet District Council, which runs the port, believes it has the potential to support up to 24 ferry sailings a day, although initial plans are for far fewer crossings. Dredging of the harbour, to allow the ferry route to reopen, began this week.
Other ports could also increase their capacity for handling Ro-Ro traffic. About 10% of business at Felixstowe, the UK’s largest port by volume of trade, is currently Ro-Ro, and it could handle more.
But the journey time from Felixstowe to Rotterdam is about seven hours – much longer than the Dover-Calais crossing and therefore less convenient for just-in-time manufacturing processes, and more expensive. And even if Felixstowe traffic went up by 10-20%, that would only make up for a 1-2% reduction in traffic at Dover.
“I don’t think that ‘no-deal’ with zero mitigation measures for transport can work,” said Pauline Bastidon from the Freight Transport Association. “There’s no two ways about it. You can move trade to different ports, you can adjust your supply chain – none of it will be enough.”
Other ports are also concerned that they may not be ready to cope with extra traffic if it is suddenly re-routed from Dover.
Portsmouth International Port, for example, currently transports up to 500 lorries a day abroad. But local councils are worried about congestion and delays if extra traffic had to be handled in the event of a no-deal Brexit.
“The distance between the freight check-in desk at Portsmouth International Port and the beginning of the motorway is just 13 lorry lengths,” said a statement issued on Thursday by council leaders in Hampshire, “so a queue of 14 lorries or more would mean queuing traffic on the motorway.”
That reflects a broad consensus within the industry that there is currently no viable alternative to Dover, and that it will take time to change the system.
“Five to six months would be a reasonable time for things to settle down and for people to get used to new ways of working,” said Andrew Potter, a logistics expert at Cardiff University.
But ports like Rotterdam and Ostend would also have to implement EU checks, and there is also the question of costs. “Extra costs have to be paid somewhere,” Dr Potter said. “They either get passed on to consumers or they hit the profit margins of the companies involved.”
In the meantime, as Parliament prepares to vote next week on Theresa May’s Brexit deal, which includes a transition period of 21 months after Brexit when all the rules would stay the same, businesses are having to prepare for all possible outcomes.
As a supporter of Brexit, Andrew Baxter of Europa Worldwide is relatively unusual in the freight logistics industry.
He believes there will eventually be a Brexit deal to keep trade moving, but he has to make contingency plans just in case.
“I need to have a department with 40 people up and running for March 29th in the event of no-deal,” he said.
“I haven’t got it at the moment, and I’m starting now. We can’t wait any longer.”
Source BBC News